Jefferies Cuts Price Target & Estimates on Owens-Illinois (OI), Experiencing Weakness in the Australia/NZ Segment
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Price: $7.18 +12.54%
Rating Summary:
10 Buy, 11 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
10 Buy, 11 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reiterating its Buy rating on shares of Owens-Illinois (NYSE: OI), but is cutting its price target by $4 to $35.
Due to weakness in Australia/NZ, which account for 10 percent of sales, the company lowered its Q2 operating margin guidance from flattish to down 300-600 bps. Sine the weakness in the market was discussed in the Q2, things have fell even more. The firm notes that OI could look to rationalize capacity to re-balance demand / supply in the region.
The firm believes that margins will increase in the second half of 2011 as it benefits from better operating leverage once the supply comes back online. It also states with 20-30 percent of its North American business renegotiating each year, there could be some upside to pricing.
Jefferies cut its 2011 and 2012 EPS estimates from $2.95 and $3.73 to $2.50 and $3.30, along with it's revenue estimates which went from $7.43 billion and $7.77 billion to $7.35 billion and $7.66 billion.
For more ratings news on Owens-Illinois click here and for the rating history of Owens-Illinois click here.
Shares of Owens-Illinois closed at $25.54 yesterday.
Due to weakness in Australia/NZ, which account for 10 percent of sales, the company lowered its Q2 operating margin guidance from flattish to down 300-600 bps. Sine the weakness in the market was discussed in the Q2, things have fell even more. The firm notes that OI could look to rationalize capacity to re-balance demand / supply in the region.
The firm believes that margins will increase in the second half of 2011 as it benefits from better operating leverage once the supply comes back online. It also states with 20-30 percent of its North American business renegotiating each year, there could be some upside to pricing.
Jefferies cut its 2011 and 2012 EPS estimates from $2.95 and $3.73 to $2.50 and $3.30, along with it's revenue estimates which went from $7.43 billion and $7.77 billion to $7.35 billion and $7.66 billion.
For more ratings news on Owens-Illinois click here and for the rating history of Owens-Illinois click here.
Shares of Owens-Illinois closed at $25.54 yesterday.
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